Friday Letter: Welcome to the global village

What do a fund of funds manager in Boston, a partner in a venture capital fund in Munich, the founder of a buyout group in Dubai and an investment manager for a government agency in Singapore have in common? For a start, they are just a few of the many hundreds of voters who have already contributed to our Global Private Equity poll for 2005.  

And possibly even more importantly, they provide emphatic evidence that today private equity really does resemble McLuhan’s oft-maligned concept of the “global village”.

Not only do these people have views on which individuals, firms and deals helped shape private equity over the past 12 months but their perspective and awareness extends far beyond the local. Our man in Dubai knows who is the best fund formation law firm in Europe. And our Boston voter helps to confirm which private equity group has made the biggest impression in China in 2005. Meanwhile our German VC not only is voting for the North American VC firm of the year, he’s also offering candidates for the leading Israeli private equity firm of 2005 – amongst many other country champions.  

It’s worth saying straight away that our polls are open until next Tuesday – 31 January – so nothing is certain yet. And if you have not voted already, you should. Now.

But with the hubbub from Davos at present filling so many column inches, it is telling to find real evidence of one of the World Economic Forum’s consistent messages: that the world is getting a much smaller, and closely interlinked, place. And the private equity industry is already making the most of that fact. General partner groups are building connections with other managers all over the world – and likewise their portfolio companies are today far more likely to be developing a network of suppliers and customers scattered far across the globe. 

Significant too is the fact that this global view is not the exclusive preserve of the heavyweight buyout firms. Of course these groups – Carlyle in particular comes to mind – have made a point of establishing what several will themselves describe as a global franchise. But others across the private equity spectrum are doing the same: there are mid-market groups who have built a sector expertise and who are now eager to apply that know-how across a host of markets. And numerous venture capital firms have developed a network of offices and partnerships that take little heed of geography but instead connect key centres of excellence relevant to their expertise (join the dots between Menlo Park, Cambridge, Munich, Tel Aviv and Mumbai).

This should all be celebrated: by the investment community looking to develop a diversified portfolio of private equity investments, the entrepreneur or CEO wanting to grow their business rapidly and meaningfully, the private equity partner keen to extend the reach and influence of their firm, even the journalist hungry for subject matter that resonates far beyond the parochial. Private equity in all its manifestations is helping shape the future of people, companies and economies the world over. Welcome to the global village.

PS: Tell us who you rate in the village at – now.